The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Robinhood Markets (NASDAQ:HOOD). While this doesn’t necessarily speak to whether it’s undervalued, the profitability of the business is enough to warrant some appreciation – especially if its growing.
How Fast Is Robinhood Markets Growing Its Earnings Per Share?
Robinhood Markets has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn’t be a fair assessment of the company’s future. As a result, we’ll zoom in on growth over the last year, instead. Robinhood Markets boosted its trailing twelve month EPS from US$1.80 to US$2.11, in the last year. That’s a 17% gain; respectable growth in the broader scheme of things.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it’s a great way for a company to maintain a competitive advantage in the market. It’s noted that Robinhood Markets’ revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. Robinhood Markets maintained stable EBIT margins over the last year, all while growing revenue 42% to US$4.6b. That’s progress.
You can take a look at the company’s revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
NasdaqGS:HOOD Earnings and Revenue History June 10th 2026
Are Robinhood Markets Insiders Aligned With All Shareholders?
Owing to the size of Robinhood Markets, we wouldn’t expect insiders to hold a significant proportion of the company. But we are reassured by the fact they have invested in the company. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$9.9b. That equates to 13% of the company, making insiders powerful and aligned with other shareholders. So there is opportunity here to invest in a company whose management have tangible incentives to deliver.
It means a lot to see insiders invested in the business, but shareholders may be wondering if remuneration policies are in their best interest. Our quick analysis into CEO remuneration would seem to indicate they are. The median total compensation for CEOs of companies similar in size to Robinhood Markets, with market caps over US$8.0b, is around US$15m.
The Robinhood Markets CEO received total compensation of just US$3.0m in the year to December 2025. That’s clearly well below average, so at a glance that arrangement seems generous to shareholders and points to a modest remuneration culture. CEO compensation is hardly the most important aspect of a company to consider, but when it’s reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.
Does Robinhood Markets Deserve A Spot On Your Watchlist?
As previously touched on, Robinhood Markets is a growing business, which is encouraging. The growth of EPS may be the eye-catching headline for Robinhood Markets, but there’s more to bring joy for shareholders. With company insiders aligning themselves considerably with the company’s success and modest CEO compensation, there’s no arguments that this is a stock worth looking into. While we’ve looked at the quality of the earnings, we haven’t yet done any work to value the stock. So if you like to buy cheap, you may want to check if Robinhood Markets is trading on a high P/E or a low P/E, relative to its industry.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
